A rapidly escalating student debt crisis is pushing millions of Americans toward default as pandemic-era protections expire, affordable repayment plans are dismantled and federal collections resume. New data cited by Forbes and survey findings from The Institute for College Access and Success show that the fallout is already spreading across households struggling to meet basic living costs.
More than five million federal student loan borrowers were already in default when Covid-era forbearance ended in 2023, collectively owing nearly $117 billion, according to figures reported by Forbes. By October 2025, the number had climbed to more than 5.5 million borrowers, with outstanding balances exceeding $140 billion, citing data from the U.S. Department of Education.
Borrowers typically enter default after falling more than 270 days behind on payments. Data released in November show that 3.68 million borrowers have already crossed that threshold, while millions more remain seriously delinquent. TICAS has warned that total defaults could soon exceed nine million.
"These findings bring even greater urgency to ongoing concerns about a looming default cliff, where an unprecedented number of borrowers struggle so much to repay their loans that they default on their payments in droves," The Institute for College Access and Success said.
The financial strain is increasingly visible at the household level. In a nationwide survey commissioned by TICAS, 42% of borrowers said they are making trade-offs between student loan payments and basic necessities such as food, housing and transportation. One in five respondents reported being either delinquent or already in default.
One borrower described the pressure in stark terms: "With how the economy is, I can barely afford to live. I have to choose between rent, loans, or putting food on the table. There's no help and it feels like [the] government doesn't care."
Policy changes have compounded those pressures. As reported by The Guardian, the Trump administration moved to shut down the Saving on a Valuable Education plan, a Biden-era income-driven repayment program designed to cap payments and offer forgiveness to low-balance borrowers. New enrollments were halted, pending applications denied and existing borrowers shifted into alternative plans with higher monthly payments.
TICAS warned that the changes, combined with the Repayment Assistance Plan created under the July 2025 reconciliation law, raise costs for low- and middle-income borrowers by extending repayment terms to as long as 30 years and eliminating hardship deferments.
Borrowers are also reporting widespread confusion and mistrust. Nearly 58% of respondents said they have little confidence the federal government will keep their loans affordable. More than half said they contacted their loan servicer to resolve problems, with many citing long wait times, inaccurate information or incorrect balances.
As collections resume, the consequences of default are severe. The federal government can garnish wages, seize tax refunds and offset federal benefits, including Social Security payments and credits such as the Child Tax Credit. The Department of Education confirmed earlier this year that enforcement has restarted.
Education Secretary Linda McMahon said taxpayers would "no longer be forced to serve as collateral for irresponsible student loan policies."
TICAS cautioned that the burden will fall most heavily on vulnerable borrowers. More than half of those surveyed had received Pell Grants, indicating they likely came from households earning under $40,000 annually. Staffing cuts at the Office of Federal Student Aid and mounting strain on loan servicers have further reduced borrowers' ability to navigate repayment options as defaults continue to rise.
